Correlation Between Akso Health and Neuronetics

Can any of the company-specific risk be diversified away by investing in both Akso Health and Neuronetics at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Akso Health and Neuronetics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Akso Health Group and Neuronetics, you can compare the effects of market volatilities on Akso Health and Neuronetics and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Akso Health with a short position of Neuronetics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akso Health and Neuronetics.

Diversification Opportunities for Akso Health and Neuronetics

-0.1

Correlation Coefficient

Akso Health  Neuronetics

Good diversification

The 3 months correlation between Akso and Neuronetics is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Akso Health Group and Neuronetics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neuronetics and Akso Health is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Akso Health Group are associated (or correlated) with Neuronetics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neuronetics has no effect on the direction of Akso Health i.e., Akso Health and Neuronetics go up and down completely randomly.

Pair Corralation between Akso Health and Neuronetics

Considering the 90-day investment horizon Akso Health Group is expected to under-perform the Neuronetics. But the stock apears to be less risky and, when comparing its historical volatility, Akso Health Group is 2.18 times less risky than Neuronetics. The stock trades about -0.04 of its potential returns per unit of risk. The Neuronetics is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  148.00  in Neuronetics on December 29, 2024 and sell it today you would earn a total of  229.00  from holding Neuronetics or generate 154.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Akso Health Group  vs.  Neuronetics

Akso Health Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Akso Health Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's technical indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Neuronetics

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Neuronetics are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very weak forward indicators, Neuronetics displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Akso Health and Neuronetics

The main advantage of trading using opposite Akso Health and Neuronetics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akso Health position performs unexpectedly, Neuronetics can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Neuronetics will offset losses from the drop in Neuronetics' long position.

The idea behind Akso Health Group and Neuronetics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.